Middle East suppliers are paying the price as hotels and developers fall behind on payment plans.
“Payment terms have gone up to nearly unbelievable lengths. A hotel recently asked me for a six-month payment period,” said Dubai-based Mobile Gastro Konzepte general manager Mirco Beutler.
He explained that a 30-day payment term would have been standard a few months ago, however, now hotels were increasingly notifying suppliers that they had doubled the period in which they would pay to within 60 days.
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“We have no choice to adapt or join a new game,” said Beutler, who added that issuing a court order or taking any kind of action against a hotel for non-payment was not an option and would only result in losing the hotel’s business.
Technical Supplies and Services general manager Omar Bahar also reported difficulties collecting payment.
“We’ve supplied various new development projects which have now been put on hold and we won’t see the money,” explained Bahar.
“I know of supply companies in the Middle East that are owed up to AED 30 million [US $8 million] from cancelled projects; it’s tough,” added Beutler.
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Sep 13, 2009 , United Arab Emirates
Consider yourself extremely lucky to get your money in 60 days. Many are extending well into 80-90 days. In some cases beyond this time frame.